Weighing the Options of Refinancing

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It has been said that only when your new interest is at least 2 points below your current rate, should you refinance your mortgage. That may have been valid years ago, but since refinancing has been costing less recently, it's a good time to explore the options of a new mortgage loan! A refinance may be worth its cost several times over, because of the benefits that it brings, along with a lower interest rate.

Advantages of Refinancing

You may be able to lower your interest rate (sometimes significantly) and have smaller mortgage payments with your refinanced mortgage. You also might have the option of pulling out some of the equity in your property by "cashing out" a sum of money to fix up your home, consolidate debt, or take your family on a vacation. You might have the option to refinance into a shorter-term mortgage, giving you the ability to build up your home equity faster.

Expenses and Fees

Of course, you will have some fees and expenses during your process of refinancing. You'll be charged the same sort of expenses and fees as with your present mortgage loan. Among these can be settlement costs, an appraisal, lender's title insurance, underwriting expenses, and so on.

Do the Math

You might consider paying points to reduce your interest rate. The money you'll save on the life of the loan might be significant if you have paid up front about three percent of the new loan total. Please consult a tax professional before acting on advice that the points paid can be deducted on your taxes.

Another thing about taxes is that when your interest rate is reduced, naturally you will also be lowering the interest amount that you will be able to deduct on your taxes. This is one more cost that borrowers take into consideration. Call us at 5623200510 to help you do the math.

Ultimately, for most people the amount of up-front costs to refinance are made up soon in monthly savings. We can help you explore what your options are, considering the effect a refinance may have on your taxes, how likely you might be to sell in the next couple of years, and your available cash. Call us at 5623200510 to get you started.

Curious about refinancing? Give us a call: 5623200510.

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Reliance Mortgage Service, Inc

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